The past decade has seen, for a variety of reasons – not least the ongoing breakdown of the biosphere – natural disasters become something of a new normal. Over that period, global economic losses caused by such events have totaled a staggering US$2.98 trillion; however, according to Aon plc’s data, only $845 billion of this has been covered by insurance, resulting in a protection gap of 72 per cent.
The firm’s Weather, Climate & Catastrophe Insight: 2019 Annual Report found that 2019 was another record-breaking year in all the wrong ways, with natural disaster losses totaling $232 billion, of which only $71 billion was insured – a protection gap of 69 per cent. The gap widens significantly when developed and developing countries are compared like for like, with Asia the most vulnerable region.
In order to drive home the unsustainability of this situation, Aon has brought together stakeholders from the worlds of insurance, risk, retirement and health, in both the private and public domain, for a conference titled ‘Collaborating to close the protection gap’. It is hoped that by promoting co-operation, a holistic approach to the problem can be fostered and mutually beneficial solutions found.
“The protection gap places an immense financial strain on governments, businesses, communities and individuals,” said Greg Case, CEO of Aon. “But financial impact is only one aspect of the toll these disasters inflict. We also must consider the profoundly troubling humanitarian and social impact – lives lost, communities compromised and businesses, as well as individual livelihoods, disrupted.
“Considering the magnitude of the challenge, a solution is beyond the ability of any individual, organisation or even sector. We have absolute conviction, though, that, collectively, we can make a difference. Our hope is that we will forge a shared commitment to new ways of collaborating that will allow us to build resilience at scale.”
The time for pre-emptive planning, unfortunately, seems to be over – the climate crisis is here and having an immediate and devastating effect. Aon’s intervention is laudable, and hopefully, should it be successful, future damage can be mitigated.